"He and I have had a relationship for years and years and years, and we have had this conversation in the past, and we agreed that we would work together on this circumstance and the timing of this circumstance," he said. "And I phoned him just before the program, and I said 'Leslie, it's been great, you've been great, and the network has been great, but I'm retiring.'"

Moonves, who often called into "The Late Show" and was occasionally the recipient of Letterman's jokes, confirmed the news in a statement:

"When Dave decided on a one-year extension for his most recent contract, we knew this day was getting closer, but that doesn't make the moment any less poignant for us," he said.

"For 21 years, David Letterman has graced our Network's air in late night with wit, gravitas and brilliance unique in the history of our medium. During that time, Dave has given television audiences thousands of hours of comedic entertainment, the sharpest interviews in late night, and brilliant moments of candor and perspective around national events. He's also managed to keep many celebrities, politicians and executives on their toes—including me.

"There is only one David Letterman. His greatness will always be remembered here, and he will certainly sit among the pantheon of this business. On a personal note, it's been a privilege to get to know Dave and to enjoy a terrific relationship. It's going to be tough to say goodbye. Fortunately, we won't have to do that for another year or so. Until then, we look forward to celebrating Dave's remarkable show and incredible talents."

Letterman, 66, is the longest-serving late-night host in TV history, last year surpassing his mentor Johnny Carson with 31 years. He began hosting the CBS show in August 1993 after leaving NBC, where he had hosted "Late Night with David Letterman" since 1982.

The announcement marks another shift in the late-night show landscape, which only recently saw the Jimmy Fallon take over "The Tonight Show" from Jay Leno, and Seth Meyers take Fallon's seat at "Late Night."

The late-night TV landscape is about to once again undergo a massive seismic shift when David Letterman retires from his "Late Show" on CBS sometime in 2015. The host made the announcement on his show on Thursday.

On Wednesday night, TBS will air a special episode of "Conan" filmed entirely in Cuba, making it the first American late-night show to broadcast from the island nation since the embargo went into effect in 1962. Host Conan O'Brien will follow in the footsteps of Jack Paar,...

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